Guest Post: Afghanistan - Newly Discovered Mineralogical Treasure House (Again)

Tyler Durden's picture

From John C.K. Daly of OilPrice.com

Guest Post: Afghanistan - Newly Discovered Mineralogical Treasure House (Again)

As the U.S.-led Afghan campaign lurches into its second decade, the country’s vast untapped mineralogical resources are again emerging in the Western media, seemingly underpinning the benefits of International Security Assistance Force troops “staying the course” and defeating the insurgency, after which these resources can be tapped, both providing the administration of Afghan President Hamid Karzai with a source beyond drugs for reconstruction and Western companies who develop the reserves a handsome profit.

The latest discovery is that Afghanistan is rich in rare earth elements (RREs). China currently has a near monopoly on the global production of RREs, and the price for a ton of unprocessed ore has soared to a dizzying $100,000 a ton.

So, what’s wrong with this picture?

Western venture capitalists should consider the following points before whipping out their checkbooks to underwrite any mining projects.

First and most obvious, Afghanistan has been in a civil war for thirty years, with Western forces intervening only in the last decade. The country is torn by tribalism and religious divides and Karzai's administrative control is largely limited to the larger cities.  Mao Tse Tung in his 1947 work "The Present Situation and Our Tasks" wrote, “Concerning attacking cities, resolutely seize all enemy fortified points and cities that are weakly defended. At opportune moments, seize all enemy fortified points and cities defended with moderate strength, provided circumstances permit. As for all strongly defended enemy fortified points and cities, wait until conditions are ripe and then take them,” a strategy the Taliban are apparently following to the letter, unconcerned with election cycles and opinion polls. The Taliban know that they have time on their side – as one Taliban commander told a U.S. military officer, “you have the watches, we have the time.”

Secondly, the administration of Karzai is increasingly viewed by the Afghan population as illegitimate, foisted on them by foreign forces, and extremely corrupt to boot. During the August 2009 presidential election, Karzai, in an election reported by foreign observers as riven with fraud, received less than 50 percent of the popular vote, triggering a runoff. Two months later, after Karzai agreed to a runoff election, tentatively scheduled for 7 November, but five days later his main opponent Abdullah Abdullah withdrew and Afghan officials canceled the election, leaving Karzai in power for a second term, despite the provisions of the Afghan constitution, alienating many Afghans from democratic principles.

Third, Afghanistan’s rich mineral base has been known for a long time. Following disastrous December 1979 Soviet invasion, extensive Soviet exploration in Afghanistan produced detailed geological maps and reports that listed more than 1,400 mineral outcroppings, along with about 70 commercially viable deposits. The USSR subsequently committed more than $650 million for resource exploration and development in Afghanistan, which included a smelting complex for the Ainak deposit that was to have produced 1.5 million tons of copper per year. In the wake of the Soviet withdrawal a subsequent World Bank analysis projected that the Ainak copper production alone could eventually capture as much as 2 percent of the annual world market. Afghanistan’s Hajigak iron deposit, in the Hindu Kush mountain range west of Kabul, is assessed as one of the largest high-grade deposits in the world.

As for the recent announcement about gigantic deposits of rare-earth metals, including lanthanum, cerium and neodymium, being discovered in Afghanistan, it is worth bearing in mind that the U.S. geologists who surveyed the sites were airlifted by Black Hawk helicopters to the Khan Neshin Village in a desert area of Helmand Province, where they worked under military protection. If such deposits are to be developed, then given the lack of security forcing geologists to be airlifted to the site, then how is the mining infrastructure to be conveyed?

Fourthly, the stupendous rise in RRE ore prices has led to a frenzied search for deposits around the world, from Estonia to Mongolia, some of which will doubtless pan out. Given Afghanistan’s instability, why would an investor risk his capital there, especially when neighboring Central Asian nations like Mongolia represent a far more stable and investor-friendly environment? Mongolia recently signed off on a massive $7 billion mining project, allowing Rio Tinto and Ivanhoe Mines a majority 67 percent share.

While Afghanistan’s mineralogical potential is vast, the country’s crippling economic and insurgency problems remain, and it’s worth nothing here that despite the 2010 joint report by the Pentagon, the U.S. Geological Survey and U.S. Agency for International Development that Afghanistan possesses "previously unknown" and untapped mineral reserves worth up to $1 trillion, two-thirds of Afghanistan’s population live on less than $2 a day.

So, even though Afghan Ministry of Mines adviser Jalil Jumriany said of the RRE discoveries, “This will become the backbone of the Afghan economy,” the question, not only for foreign investors but the Afghans themselves remains, “qui bono?”

There are no clear answers emerging to this question from Kabul anytime soon.

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prains's picture

“This will become the backbone of the Afghan economy,” 

 

heroin, qui?

Fukushima Sam's picture

Many countries are "rich" in rare earth elements, because they are not really that rare.  No surprise that Afghanistan is one of them.

What Afghanistan is really "rich" in is lack of environmental protections, resulting in the mining of the REEs to be super-profitable!

zerozulu's picture

Stealing is the most lucrative business.

carlhenson's picture

Possibly, though do that only if you think you wouldn't get caught or else.

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zerozam's picture

Heroin is, and will be, the backbone of Afghan economy.

porrannor's picture

Call China to come and get it...

jaffa's picture

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Newsboy's picture

Qui bono?

 

China is already developing Afghan mines.

 

China has good economic relations with Afghanistan, and is conveniently located next door.

jaffa's picture

The country’s vast untapped mineralogical resources are again emerging in the western media, seemingly underpinning the benefits of international security assistance Force troops staying the course and defeating the insurgency, after which these resources can be tapped, both providing the administration of afghan president hamid karzai with a source beyond drugs for reconstruction and western companies who develop the reserves a handsome profit. Thanks.
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Ancona's picture

So we've been dropping all those bombs to loosen up the soil for mining?

 

Brilliant strategy! Now, if we can only get those pesky Afghans out of our fucking way.......

Ag Tex's picture

Time to free the shit out of them!

porrannor's picture

No.., we are loosening the soil to make it easier for China to mine it....

Deadpool's picture

only one resource that counts there: opium.

HamyWanger's picture

These lunatic, conspiracist attempts to make our Wars in the Middle East theater look like oil/minerals grabs are an insult to the sacrifice of thousands of young Americans, who dedicated their life to the preservation of freedom and equality around the world.

Give me a break. Who would be cynic enough to send thousands of people to their death and injuries for oil, and then say it was for liberty? Some men are evil, it's true, but I can't see anybody in our current government who would be able to do such things. 

jdelano's picture

please tell me this is really good sarcasm?  

HamyWanger's picture

No, it wasn't. I'm just sad and fed up to see a serious blog like Zerohedge joining the ranks of Rense.com and Iamthewitness. 

No war in the world has ever been fought because of the military/industrial complex, but because of the beautiful, everlasting thirst for liberty of mankind. Nutjobs, crackers, goldbugs and hillbillies need to understand that. 

jdelano's picture

alright.  you almost had me.  Definitely sarcasm.  kudos.  you're even more convincing than colbert.  

DaveyJones's picture

his name is your first clue

Pladizow's picture

Hamy Wanger is Tyler Durden - he writes these things to simply stir the pot and get a reaction.

Watch how fast Tyler responds!

 

Biosci's picture

Wow, Hamy.  I'm impressed.  Only now does the true nature of your plan become clear.  Lay low for a few months, and let a whole new school of n00b sharks gather.  Then throw out some chum and watch the show.  Well done!

pods's picture

So you see no problem with the concept of forcing freedom on someone?  If you are making someone act in a particular way, it ain't freedom numbnuts.

pods

Ponzi Unit's picture

Hamy, you are deeply hypnotized.

BrocilyBeef's picture

Hamy "Just look at the dirty little hole I popped out of" Wanger.

Max Hunter's picture

 Zerohedge joining the ranks of Rense.com and Iamthewitness. 

Well, only someone charged with battling the "truth" movement would even know about DBS.. You just showed your hand Hamy... You didn't just stumble across that website.. Don't try to take us for fools..

FeralSerf's picture

Boy are you misinformed!  

All wars are fought for resources.  None are fought to free the proletariat, although they may be convinced that that is the case since they must become the cannon fodder.

"Why of course the people don't want war. Why should some poor slob on a farm want to risk his life in a war when the best he can get out of it is to come back to his farm in one piece? Naturally the common people don't want war: neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country."  --   Hermann Goering

Biosci's picture

Boy are you misinformed!

Hee hee.

Biosci's picture

Goddamn you're inspring, Hamy.  You make me want to go vote!

Scisco's picture

Lookup the word psychopath and for followup, what professions the tend to choose.

Deadpool's picture

Elizebeth Warren, is that you? (a flag for an avatar and rah-rah like this?? this ain't no MSNBC blog!)

Syrin's picture

I like the fact that you see good in people, but I think this is a bit naive.   Those in Congress would whore out their mother and sister if it meant re-election.  Think of the worst person you know not in prison and realize that person is ten fold more ethical than most in Congress.   Recent elections have made some adjustments, but not enough to be significantly consequential.

 

Look at it this way.   Our executive branch and Depratment of JUSTICE gave GUNS to f***ing foreign criminals with the INTENT to remove our gun rights.   it has led to the deaths of hundreds of innocents.   This wasn't some accident.   it was an intentionally designed planned effort.   Never under estimate the potential evil of gov't officials.

doomz78's picture

I hope you're joking.  If not...put some vicks vapo-rub on your berries.  Open the freezer door.  Now insert your nuts in the freezer.  Wait 20 minutes.  Slap yourself in the face.  Walk over to a mirror.  And say,"I believe the propaganda that the mainstream media has served me all these years.  I am a moron for doing so."  Now go to your computer and say you are sorry to the great people of zero Hedge. 

Thank You.

 

Shirley Wilfahrt's picture

That brings a fucking tear to my eye.....<standing golf clap>

Fucking brilliant.....really....

 

My only advice for everyone this weekend.

Eat ass....Talk shit.

 

Cheers Bitchez!

Rome is burining's picture

Hamy
Idiot! Go read Perkins "confessions of an economic hitman" and do a few freedom of information requests to uncle Sam.

The Fonz...before shark jump's picture

haha what are the exploration costs going to be? can I go stake a mining claim and work the property? will I get shot at? is the infrastrucure there to accomodate mining? How many smelting facilites are there? etc etc what a laff what a joke this is.  trying to paint a picture of Afghanistan can one day become a minreal resource powerhouse is laughable.  The only commodity that the US govt is concerned about in afghanistan is the opium trade to help fund their BS CIA covert NWO activites thats it....in fact after the Americans came in the opium trade has never been more robust....Plenty of gold in Colombia but few go in there to mine it because it is so fucked up...